What is rezoned property in Israel, and where should you look for rezoned lands for sale in Israel?

Information on the stages of land rezoning, along with plans and projects offering rezoned lands for construction in Israel.

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From HLK Website Hebrew

Purchasing rezoned property in Israel presents a golden opportunity for potential investors looking for an investment channel with significant short-to-medium-term profit potential and low risk levels.

Buying rezoned property in Israel is one of the more complex types of investments in the real estate world due to the knowledge and experience required to locate and execute a safe and profitable deal.

So, what is important to know about rezoned lands for sale? Why should you invest in them, what should you watch out for, and where can they be found? Our experts at the Land Realization Company explain.

Investing in Rezoned property in Israel – Summary

Question	Answer
What is rezoned land?	Usually refers to agricultural land that has undergone a zoning change to become available for construction, mostly for residential use (but not exclusively).
Who is responsible for rezoning?	The local authorities or the state, sometimes initiated by private developers. Approval is obtained from local, district, and national planning and building committees.
Stages of the rezoning process	Drafting and submitting master plans; drafting a detailed plan after approval; executing land consolidation and reparcellation; submission to relevant committees; and final approval and rezoning.
Potential advantages	Relatively low investment cost compared to a built property with reduced risk levels, but carrying massive profit potential (especially after an expansion of building rights).
Disadvantages, chances, and risks	A short-to-medium-term investment. However, it can face obstacles such as delays. Calculating the timeline is not an exact science and is mostly based on estimation.
Estimated price range	Varies depending on location, size, rezoning potential, and future plans for the land.

What is Rezoned property in Israel?

Rezoned land is a piece of land that has undergone a special process (literally translated as "thawing") in which it is converted from land where building is prohibited into land that is available for construction.

Generally, when discussing rezoning, it refers to agricultural land not originally intended for building that undergoes a change of zoning to make it available for construction. These lands can be designated for diverse needs, including residential, commercial, industrial, and tourism.

There are various types of rezoned lands, with the most common being land rezoned for residential or office use. Therefore, if you see a project marketed as "rezoned lands," it means those plots have already received all the necessary approvals to change their zoning for construction purposes.

Who Decides if property in Israel is Rezoned or Not?

The ultimate decision-makers regarding the approval of land rezoning are the planning and building institutions, including the local, district, and national planning and building committees.

Sometimes, the initiative to rezone land is advanced through the collaboration of several parties: the Israel Land Authority (ILA), the local authority, and private developers.

Typically, rezoning procedures begin with a decision by state authorities and planning institutions to rezone a specific area of land—a necessity in Israel due to the housing shortage and the scarcity of land reserves available for construction. In the next stage, the state or planning institutions begin planning the construction, publishing relevant information to the public, landowners, and developers at various stages.

These planning institutions assemble the master plan and submit it for approval to the committee authorized to approve the complex based on the hierarchy of authority. Following this, they will also prepare a detailed plan for approval if required. The committees' role is to ensure that the rezoning plan meets all regional and national standards and superior plans. Final approval is granted once all required conditions are met.

How is Land Rezoning Carried Out?

The land rezoning process is gradual and includes several primary stages:

• Step One: Drafting a Master Plan. The master plan is designed by a professional internal or external team on behalf of the relevant authority in whose jurisdiction the land is located. This plan includes details about the types of land zoning, the layout of planned infrastructure, and other specifications.

• Step Two: Submitting the Master Plans. The plans created in the previous step are deposited for public review (the "objections phase") with the authorized committee (usually local, district, or national). The committee decides to approve, reject, or amend them based on public feedback. Once the master plan (and subsequently the detailed plan) is approved, the agricultural land is officially defined as "rezoned land."

• Step Three: Detailed Plan and Reparcellation. After the master plan is approved, the next step is usually preparing a detailed plan. This stage typically involves "consolidation and division" (reparcellation), where building rights are consolidated and redivided to ensure owners receive their proportional share in the project based on the value, type, and size of their land.

• Step Four: Rezoning and Realizing the Investment. The final stage is the actual rezoning of the land. Subject to development, property owners can usually submit building permit applications and begin construction. Alternatively, owners often have the option to sell the land based on the new building rights and zoning changes, or wait to sell until construction begins or concludes.

Advantages of Investing in Rezoned vs. Non-Rezoned Land

The primary advantage of investing in rezoned land compared to non-rezoned land is the savings in time and rezoning efforts. This allows for a faster realization of the investment at reduced risk levels while still maintaining significant profit margins.

The bottom line of investing in rezoned lands can still potentially reach yields of tens to hundreds of percent, meaning investors do not necessarily have to insist on buying unzoned land. It is essentially a golden opportunity to purchase land at a much lower price than a built property and enjoy continuous appreciation and value increases as construction nears completion.

Furthermore, rezoned lands often undergo a process called "expansion of building rights," where authorities approve building 2, 3, 4, or even 8 times the volume established in the original plan. This expansion reflects an attempt to increase municipal tax revenues, boost state taxes, maximize a scarce land resource, and benefit investors and developers who can generate more profit for the same acquisition cost.

How Much Does Rezoned Land for Construction Cost?

The price of rezoned land for construction will generally be higher than that of agricultural land, but it is important to factor in the reduced risk levels and the ability to realize the investment sooner.

The cost of rezoned land for sale varies based on parameters such as the location of the property, the size of the plot, and the future plans applicable to it. Generally, the more central and in-demand the location is, and the more building rights it grants, the more expensive the land will be.

Where Can You Find Rezoned Lands for Purchase?

The Land Realization Company markets several projects offering rezoned lands for investment, including:

• MATAM 2 in Haifa: A project to establish a mixed-use business and technology park with commercial, office, and residential spaces, set to transform the face of the Haifa Bay. An expansion of rights by 4 to 8 times is expected.

• Icon Ashdod Project: A plan to establish a new, futuristic mixed-use high-tech park in the port city, expected to become the most sought-after district in the southern region. An addition of up to 650% in building rights has been approved, including 30% for residential needs.

• Icon Energy Park Hadera Project: A prestigious complex near the sea that will feature residential buildings, offices, and entertainment and leisure centers. A doubling of building rights has been approved.